Fri, 22 October 2021
Roth conversions, HSAs, pension choices, risk management: these are the topics of today’s listener questions.
Susan, Gina, IM, and Daniel all submitted their questions to me via RogerWhitney.com/AskRoger and you can too! If you have any retirement questions, or even if you simply want to leave a comment about the show, click on the link to present your question.
Whether you are looking to learn more about HSAs, Roth conversions, or evaluate your pension choices, listening to other listeners’ questions can help you learn how to frame your own questions and consider your options by always keeping your goals in mind.
How to evaluate the best way to take a pension?
Susan recently asked her financial advisor how she should take her pension and wasn’t satisfied with his answer.
There are several options to choose from when deciding how to take a pension. One choice is to take the pension for a larger monthly sum for the duration of the pensioner’s life. Another option is to take a smaller amount over the course of the lives of both the pension holder and their spouse. A third option is to opt for a lump sum payment and forgo the monthly payments altogether.
When making this decision there are a few ways to evaluate your choices. Create a what-if scenario to help you compare all the options. Then evaluate them next to your retirement plan of record. Listen in to hear how I perform this exercise with my clients.
HSAs after age 65
HSAs are amazing tools that can help you reach your retirement goals. Gina’s question is about HSAs after age 65. She is still employed and plans to continue working for a few more years. She would like to continue to stay enrolled in her high deductible insurance plan so that she can continue to contribute to her HSA, but she isn’t sure how that would affect her Medicare choices.
This is a great idea but navigating these waters is tricky since the rules surrounding Medicare are so complicated. Making a mistake could lead to a gap in coverage or even a lifetime penalty on parts B and D premiums.
You’ll first want to check the rules surrounding your Medicare eligibility with your employee health insurance provider. Next, you should contact a Medicare navigator like Boomer Benefits.
Should IM roll over her 401K to a Roth if she is worried about financial protections?
IM writes in with a question about rolling over a 401K to a Roth IRA. She is worried about losing ERISA coverage when transitioning this money. ERISA stands for the Employee Retirement Security Income Act which was put in place to protect workers’ retirement plans. 401Ks are covered under this federal law; however, the protections for IRAs vary wildly from state to state.
The first thing to do when considering this question is to check on the rules governing Roth IRA protections in your state. Next, you’ll want to evaluate your personal financial risk and how important this kind of coverage is to you.
Make sure to scroll down to the bottom of the show notes to check out all the links to the resources mentioned in this episode.
OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN
Resources Mentioned In This Episode
BOOK - Retirement Planning Guidebook by Wade Pfau
Roger’s YouTube Channel - Roger That
BOOK - Rock Retirement by Roger Whitney
Roger’s Retirement Learning Center